PGS’ ambition is to develop superior
`seismic data quality to support
`customers’ exploration and
`production success
`
`ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 1
`
`

`

`THIS
`IS PGS
`
`KEY
`FIGURES
`
`Petroleum Geo-Services (PGS) is a focused Marine geophysical company that
`provides a broad range of seismic and reservoir services, including acquisition,
`imaging, interpretation, and field evaluation. The Company’s MultiClient data
`library is among the largest in the seismic industry, with modern 3D coverage
`in all significant offshore hydrocarbon provinces of the world.
`
`CONTENT
` 1 THIS
`
` IS PGS
`12 A CLEARER
`
` IMAGE
` 22 BUSINESS
`
` AREAS
` 32 PGS
`
` PERFORMANCE
`46 BOARD OF DIRECTORS’
`
` REPORT
`
` 56 FINANCIAL
`STATEMENTS
`
`STREAMER MARKET
`
`NUMBER OF SEISMIC 3D
`VESSELS IN OPERATIONS
`
`SHARE OF21%AS OF YEAR-END 2013 (PGS ESTIMATE)
`11AS OF APRIL 2014
`PER VESSEL12.9
`
`AVERAGE STREAMERS
`
`BY THE END OF 2015
`
`PROPOSED DIVIDEND
`
`INCREASE OF39%COMPARED TO 2012
`395PATENTS
`9.2YEARS BY THE END OF 2015
`
`NUMBER OF PATENTS
`GRANTED
`
`Patents held by PGS granted under the
`laws of the U.S., the UK and Norway
`
`AVERAGE
`VESSEL AGE
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 2
`
`

`

`1L
`
`OREM
`THIS
`IPSUM
`IS PGS
`
`FINANCIAL
`CALENDAR
`2014
`
`May 8
`Annual General Meeting
`May 9
`Q1 2014 Earnings Release
`July 24
`Q2 2014 Earnings Release
`October 23 Q3 2014 Earnings Release
`December 19 Capital Markets Day, Oslo
`
`REVENUE SPLIT
`
`VESSEL UTILIZATION
`
`PGS REVENUES
`In millions of US dollars
`
`2000
`
`1500
`
`1000
`
`500
`
`0
`
`Marine Contract 45%
`MultiClient 45%
`Imaging 8%
`Other 2%
`
`Contract 45%
`MultiClient 42%
`Steaming 10%
`Yard 3%
`
`2010
`
`2011
`
`2012
`
`2013
`
`BUSINESS
`HIGHLIGHTS
`2013
`
`Improved earnings
`compared to 2012
`driven by all business
`areas.
`
`Took delivery of Ram-
`form Titan, the first in a
`series of four Ramform
`Titan-class vessels.
`
`MultiClient late sales at
`a record high, delivering
`good returns on the
`investments made in
`MultiClient.
`
`Amended and extended
`the revolving credit
`facility.
`
`The Board of Directors
`proposes a dividend of
`NOK 2.30 per share, up
`39 percent from 2012.
`
`Completed the first
`ever full-scale simul-
`taneous acquisition
`of Towed EM and 2D
`GeoStreamer® seismic.
`
`New imaging techno-
`logies enabled PGS to
`get a perfect seismic
`tie at well locations
`in areas where, until
`now, this has been
`impossible.
`
`Commenced acquisition
`of the Triton Full
`Azimuth GeoStreamer
`survey in the Gulf of
`Mexico.
`
`Introduced a Quality
`Improvement Program
`to capture lost revenues
`by preventing quality
`related losses.
`
`KEY FINANCIAL FIGURES
`
`In USD million except per share data
`Revenues
`EBITDA (as defined)
`EBIT ex. impairment charges¹
`EBIT as reported
`Net income
`EPS
`Net cash provided by operating activities
`Capital expenditures
`Cash investment in MultiClient library
`Total assets
`MultiClient library
`Cash and cash equivalents
`Shareholders equity
`Net interest bearing debt
`¹ See notes to the financial statements for details of impairments by period presented
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`2013
`1,501.6
`828.9
`397.1
`382.1
`238.3
`1.11
`775.3
`437.8
`373.0
`3,544.3
`576.9
`263.8
`2,065.6
`666.7
`
`2012
`1,518.3
`776.2
`293.0
`293.8
`185.5
`0.86
`752.9
`368.1
`297.4
`3,275.6
`382.3
`390.3
`1,911.5
`435.6
`
`2011
`1,253.3
`534.8
`141.3
`138.7
`33.7
`0.16
`480.4
`279.9
`203.9
`3,137.2
`334.1
`424.7
`1,771.7
`394.2
`
`2010
`1,135.1
`475.4
`130.5
`51.4
`(14.0)
`(0.07)
`355.5
`223.5
`166.7
`3,035.0
`310.8
`432.6
`1,755.3
`279.2
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 3
`
`

`

`2T
`
`HIS
`IS PGS
`
`PGS took delivery of the Ramform Atlas in late January 2014,
`the second in a series of four Ramform Titan-class vessels.
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 4
`
`

`

`3T
`
`HIS
`IS PGS
`
`CEO letter 2013
`
`DEAR FELLOW
`SHAREHOLDER
`
`All business areas contributed to the higher margins we achieved in 2013.
`Going forward, we are targeting continued earnings growth driven by the
`vessel new build program and our industrial business approach.
`
`We entered 2013 at a strong pace. However, sharper focus on cost and
`improved cash flow among our customers became increasingly appar-
`ent during the first half of the year and made the market more chal-
`lenging than anticipated. PGS responded by shifting more capacity
`into MultiClient activities, where better opportunities were identified.
`Reallocating capacity delayed revenue timing, since the MultiClient
`business model entails sales over a number of years.
`
`The Industrial Approach
`The Industrial Approach is all about establishing a sound, industrial
`platform for delivering performance through the cycle and gener-
`ating consistent returns to our shareholders. The platform is sup-
`ported by three pillars: a vessel investment strategy, an operational
`strategy and a financial strategy.
`
`Our ongoing new build program is governed by our vessel investment
`strategy, which specifically targets capacity investments that will bol-
`ster PGS’ market differentiation. Our most sustainable competitive
`advantage is the productivity of the fleet, primarily the high capacity
`Ramform vessels. Since 2008 we have taken delivery of five new ves-
`sels. Ramform Atlas, the latest fleet addition, was delivered late January
`2014. Two more Ramform Titan-class deliveries are scheduled for 2015.
`
`Fleet renewal has reduced the average vessel age significantly and by
`end 2015 we will have increased the number of streamers in the water
`by more than 50 percent since 2012. Market share is not a PGS objective,
`but critical mass is. We will only deploy PGS capital to new builds when
`we can establish real productivity differentiation and of course can see
`the prospect of a satisfactory Return On Capital Employed. All other
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 5
`
`

`

`capacity will be chartered in. We will as well avoid building capacity to
`try to hit anticipated peaks in the market , but add new capacity step by
`step through the cycle in line with market and replacement needs.
`
`The main objectives of our operational strategy are to maintain our
`leading position within Health, Safety and Environment, increase
`our productivity advantage over peers and implement differentiat-
`ing GeoStreamer-based technologies on all vessels and in all imag-
`ing centers. Our technology position has improved significantly over
`recent years and we intend to continue to harvest from our technol-
`ogy pipeline. Developing a focused organization that can optimize
`profitability by balancing Marine Contract and MultiClient activities
`is another important aspect of our operational strategy. Since 2010
`we have had a stronger focus on MultiClient, leading to growth in
`size and profitability. Pre-funding has been at a healthy level and
`is targeted to be in the range of 80-120 percent of capitalized cash
`investments. Supporting our operational strategy is a relentless
`drive for continuous improvements and operational excellence.
`
`The financial strategy consists of capital discipline, a prudent finan-
`cial structure and a conservative gearing policy with focus on increas-
`ing both return on capital employed and dividend capacity.
`
`We will continue to develop our business along these industrial lines
`of thinking.
`
`2015 marks the end of our current new build program. From then on, it
`is about capitalizing on the benefits of a GeoStreamer-equipped fleet,
`and our improved productivity differentiation. Our focus will continue to
`be on improving profitability and return on capital employed while deliv-
`ering free cash flow and increased dividend capacity. We will grow the
`MultiClient business further and we remain confident that Geo Streamer
`Imaging will become yet another differentiator for the Company. We
`will continue to develop and commercialize new technologies and do
`our utmost to maintain leadership in Health, Safety and Environmen-
`tal performance as well as delivering cost and quality excellence.
`
`Strong Performance
`In 2013, fleet operations and safety performance reached the best
`levels we have ever achieved. Strong operational performance will
`always be an important driver for improved financial results.
`
`4T
`
`HIS
`IS PGS
`
`“WE WILL ONLY
`DEPLOY PGS CAPITAL
`TO NEW BUILDS WHEN
`WE CAN ESTABLISH
`REAL PRODUCTIVITY
`DIFFERENTIATION. ”
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 6
`
`

`

`5T
`
`HIS
`IS PGS
`
`MultiClient late sales came in at a record level in 2013. This confirms
`the attractiveness of our MultiClient library and our ability to generate
`solid returns on our MultiClient investments. The lower pre-funding
`level experienced in 2013, compared with 2012, was mainly due to a
`lower proportion of surveys covering held acreage and relates to timing
`of expected cash flows. Our MultiClient performance in 2013 demon-
`strates healthy demand for quality products in attractive locations,
`despite customers’ increased focus on cost and improved cash flow.
`Our external Imaging revenues ended at approximately the same
`level as for 2012, while MultiClient processing increased in 2013.
`
`Marine Contract’s operating margin for the full year 2013 ended at
`a solid 29 percent.
`
`Improved Financial Flexibility
`We increased and extended our revolving credit facility in 2013, which
`contributed to a debt maturity profile of more than four years. At
`our capital markets day presentation in 2013, we flagged that the
`Company was considering refinancing of the Term Loan B. With the
`successful completion in March 2014 of both the refinancing of the
`Term Loan B and the Japanese export credit financing for the two last
`Ramform Titan-class vessels, the average time to maturity for our
`debt and drawing facilities has increased to almost six years.
`
`Outlook
`In 2014, basins offshore Brazil will be important drivers for seismic
`demand in the wake of the two licensing rounds completed in the
`region in 2013. Further north, oil companies are making discoveries
`offshore Central America and the hydrocarbon potential there will be
`further explored in 2014. Activity levels in the Gulf of Mexico have
`picked up, and we began our Triton Full Azimuth survey there in
`November 2013. Willingness to explore offshore Africa and Australia
`is growing. That said, activity levels in Nigeria, Asia Pacific, and off-
`shore Libya and Egypt remain relatively low, although these regions
`offer good future growth potential.
`
`The North Atlantic region will once again be busy, driven by high
`exploration and production interest. We expect very healthy market
`conditions for the upcoming summer season.
`
`We entered 2014 with a strong order book and our focus is increasingly
`on building backlog for the fourth quarter 2014 and first quarter 2015.
`
`In late 2013, we launched a Quality Improvement Program aimed at
`improving profitability through capturing lost revenues by preventing
`quality shortcomings. In addition in early 2014, we launched a new cost
`initiative, targeting a run-rate cost reduction of $30 million by year-end.
`
`Differentiation through Innovation
`Technology plays an increasingly important role in differentiating
`seismic suppliers. Advancing PGS’ status as a leading innovator is
`a strategic objective. While GeoStreamer is the best example of our
`current differentiation through technology, further innovative prod-
`ucts have been commercialized in 2013.
`
`The long-term prospects for our industry are good. Energy companies
`continue their search for new hydrocarbon resources in regions featur-
`ing deeper waters, harsher environments, extreme reservoir depths,
`and complex geologies. PGS’ excellent reputation, unique technolo-
`gies and solid market share in the higher-end survey market segment
`makes us an attractive contractor and partner for oil companies.
`
`The inherent capabilities of GeoStreamer have been an eye-opener
`for many clients. A good example is Lundin Petroleum’s application
`of Separated Wavefield Imaging in combination with Full Waveform
`Inversion on GeoStreamer data, for the now Statoil operated Johan
`Sverdrup field. The result was a perfect seismic tie at well location,
`an impossible task using conventional seismic data. Another example
`of acceptance of our technology in 2013 was the first ever full-scale
`simultaneous acquisition of Towed EM (Electro Magnetic) and 2D
`GeoStreamer seismic data. The first combined data sets to be avail-
`able in 2014.
`
`Our services are competitive, we offer leading-edge technologies,
`and our financial position is robust.
`
`JON ERIK REINHARDSEN
`President and CEO
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 7
`
`

`

`6T
`
`HIS
`IS PGS
`
`THE WORLD
`OF PGS
`
`OFFICES
`PGS has offices
`in 21 countries
`around the world
`and operates major
`regional centers in
`London, Houston, and
`Singapore, with the
`headquarters in Oslo,
`Norway.
`
`TOTAL RECORDABLE CASE
`FREQUENCY (TRCF)
`
`AVERAGE NUMBER
`OF EMPLOYEES
`
`LOST TIME INCIDENT
`FREQUENCY (LTIF)
`
`0.94
`
`2500
`
`2000
`
`1500
`
`1000
`
`500
`
`0
`
`0.16
`
`Per million man-hours, compared to
`0.66 in 2012.
`
`Per million man-hours, compared to
`0.17 in 2012.
`
`2010
`
`2011
`
`2012
`
`2013
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 8
`
`

`

`7T
`
`HIS
`IS PGS
`
`EXTERNAL IMAGING
`REVENUES HAVE INCREASED
`
`40%OVER THE PAST FIVE YEARS
`
`MEGASURVEY 3D
`COVERAGE OF MORE THAN
`
`690,000
`
`SQUARE KILOMETRES
`
`Imaging & Engineering
`
`RESEARCH AND
`DEVELOPMENT SPENDING
`
`OF APPROXIMATELY USD60 MILLION ANNUALLY
`
`MultiClient
`
`3D LIBRARY COVERS
`MORE THAN
`
`580,000
`
`SQUARE KILOMETRES
`
`JUBARTE'S OPTOSEIS SYSTEM
`INSTALLED AT WATER DEPTHS
`GREATER THAN
`
`1,000
`
`METERS
`
`The first Permanent Reservoir Monitoring
`system installed at such depths.
`
`2D LIBRARY
`MEASURES
`
`350,000
`
`LINE KILOMETRES
`
`Ramform Titan-class
`
`AFT BEAM MEASURES70METERS
`
`TOWING CAPACITY OF
`
`24STREAMERS
`
`16 streamers in exploration mode
`with 100 meter separation.
`
`FUEL CAPACITY OF6,000
`
`CUBIC METERS
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 9
`
`

`

`8T
`
`HIS
`IS PGS
`
`PGS’ COMPETITIVE
`ADVANTAGES
`PGS’ two foremost competitive advantages are the Ramform fleet and the proprietary
`GeoStreamer technology platform. The Ramform vessels deliver proven operational
`capabilities and superior efficiency and deploy state-of-the art technologies.
`
`PGS holds the industry record for vessels that tow and handle the
`greatest number of streamers. Fleet efficiency will continue to
`improve in 2014 as the new Ramform Atlas adds its contribution to
`performance. In 2015, two more Ramform Titan-class vessels are
`scheduled for delivery, culminating the fleet renewal program.
`
`The Company’s most prominent technology differentiator is the
`dual-sensor streamer technology — GeoStreamer. Benefits of the
`GeoStreamer, compared to a conventional survey streamer, are
`higher resolution, better depth imaging, and superior operational
`efficiency. GeoStreamer improves the seismic value chain, from
`acquisition through processing.
`
`PGS BUSINESS AREAS
`
`MARINE
`CONTRACT
`
`MARINE MARKET
`LEADERSHIP
`Marine Contract acquires
`seismic data exclusively for
`oil and gas exploration and
`production companies.
`
`MULTICLIENT
`
`OPERATIONS
`
`DIVERSE MULTICLIENT
`LIBRARY
`MultiClient initiates and man-
`ages seismic surveys which PGS
`acquires, processes, markets
`and sells to multiple customers
`on a non-exclusive basis.
`
`PRODUCTIVITY
`LEADERSHIP
`Operations supports Marine
`Contract and MultiClient with
`vessel resources and manages
`fleet renewal strategies.
`
`IMAGING &
`ENGINEERING
`
`TECHNOLOGY
`DIFFERENCIATION
`Imaging and Engineering
`processes seismic data acquired
`by PGS for its MultiClient library
`and for external clients on
`contract and manages research
`and development activities.
`
`45% OF 2013 REVENUES
`
`45% OF 2013 REVENUES
`
`8% OF 2013 REVENUES
`
`2% of revenues relates to Other Marine
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 10
`
`

`

`THE PGS
`HISTORY
`
`1991
`
`Geoteam and Precision
`Seismic merge to form
`Petroleum Geo-Services
`(“PGS”). Later the
`Company merged with
`Nopec. PGS' vision was
`to provide the most ef-
`ficient acquisition of 3D
`marine seismic data.
`
`1992
`
`PGS was incorporated
`as a public limited liabil-
`ity company, Petroleum
`Geo-Services ASA, and
`listed on Oslo Stock
`Exchange.
`
`1993
`
`Initial public offering
`on NASDAQ in the
`United States. With the
`acquisition of Tensor
`Inc., specialists in 3D
`processing and depth
`imaging, PGS’ expanded
`into the data processing
`field.
`
`1994
`
`Acquisition of ERC
`– a reservoir consultancy
`group.
`
`1995
`
`Ramform seismic
`vessel technology was
`introduced with delivery
`of the Ramform
`Explorer. From 1995 to
`1999, PGS designed,
`built, and deployed six
`proprietary Ramform
`survey vessels and grew
`to become a worldwide
`leader in the develop-
`ment and industrial-
`ization of 3D marine
`seismic acquisition.
`
`
`1997
`
`PGS was listed on
`the New York Stock
`Exchange . PGS Produc-
`tion is conceived with
`the acquisition of Golar-
`Nor and the FPSOs
`Petrojarl I and Petrojarl
`Foinaven.
`
`1998
`
`The production services
`business Atlantic Power
`was acquired. PGS
`added the Ramform
`Banff to the fleet of
`FPSO vessels.
`
`1999
`
`A fourth FPSO, the
`Petrojarl Varg, was
`bought from Saga
`Petroleum.
`
`
`2000
`
`PGS sold its subsidiary
`Spinnaker Exploration.
`
`2001
`
`The Company’s data
`management business
`was sold to Landmark
`Graphics Corporation.
`Ramform Victory tows
`the world's first 16
`streamer spread.
`
`
`2002
`
`PGS bought into in
`the Varg field in the
`North Sea from Norsk
`Hydro and Statoil and
`established the explo-
`ration and production
`company Pertra. PGS
`completes the world's
`1st commercial Multi
`Azimuth (MAZ) survey
`at Varg.
`
`
`2008
`
`PGS took delivery of
`the Ramform Sovereign
`and the vessel sets
`new industry record
`with deployment of
`17 streamers.
`
`2009
`
`PGS took delivery of the
`Ramform Sterling and
`launches the imaging
`technology hyperBeam.
`Share issue of approx-
`imately 10 percent to
`strengthen the Com-
`pany’s balance sheet.
`
`
`2010
`
`PGS emerged as
`a focused marine
`geophysical company,
`following sale of its On-
`shore seismic business.
`PGS was reorganized
`into global product lines
`within four business
`areas: Marine Contract,
`MultiClient, Operations ,
`and Imaging & Engi-
`neering. PGS Apollo
`joined the fleet. Share
`issue of approximately
`10 percent in order to
`position PGS for future
`growth.
`
`2011
`
`PGS orders two new
`Ramform Titan-class
`vessels from Mitsubishi
`Heavy Industries Ltd.
`in Japan, with options
`for additionally two
`vessels.
`
`2003
`
`PGS sold Atlantis to
`Sinochem. An inability
`to meet debt obliga-
`tions made PGS to file
`for Chapter 11 under the
`US Bankruptcy code in
`July. PGS emerged from
`Chapter 11 in November
`the same year.
`
`
`2005
`
`Pertra was sold to
`Talisman, and PGS
`became a dedicated
`oil services company.
`In December the same
`year a full refinancing
`of the Company was
`completed.
`
`
`2006
`
`PGS demerged its
`floating production by
`listing and distributing
`to shareholders the
`company Petrojarl
`ASA. PGS becomes a
`dedicated geophysical
`services company and
`announces a plan to
`build two Ramform
`S-class vessels.
`
`
`2007
`
`In 2007 PGS introduced
`the GeoStreamer, the
`first ever dual sensor
`streamer. The company
`sells Ramform Victory
`to the Japanese Minis-
`try of Economy Trade
`and Industry (“METI”).
`PGS acquired Arrow
`Seismic, MTEM and
`Applied Geophysical
`Services (“AGS”). The
`first dividend in PGS
`history was paid.
`
`2012
`
`PGS exercised options
`to build another two
`Ramform Titan-class
`vessels. PGS launched
`its Towed EM streamer
`technology, made a
`successful installa-
`tion of an OptoSeis
`permanent reservoir
`monitoring system
`at the Jubarte field in
`Brazil and launched
`Separated Wavefield
`Imaging – SWIM.
`
`2013
`
`PGS took delivery of
`the Ramform Titan, the
`first vessel in a series
`of four RamformTitan -
`class ships. The compa-
`ny re-entered the Gulf
`of Mexico with acqui-
`sition of the Triton Full
`Azimuth GeoStreamer
`MultiClient survey.
`
`2014
`
`Ramform Atlas, the
`second Ramform
`Titan-class vessel was
`delivered in January.
`
`TO BE
`CONTINUED
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 11
`
`

`

`10
`THIS
`IS PGS
`
`EXECUTIVE
`MANAGEMENT
`
`Jon Erik Reinhardsen
`President and CEO
`
`Gottfred Langseth
`Executive Vice
`President and CFO
`
`Per Arild Reksnes
`Executive Vice
`President, Marine Contract
`
`Mr Langseth joined PGS in November
`2003 and was appointed Exe cutive
`Vice President and Chief Financial Offi-
`cer as of January 1, 2014. He was Chief
`Financial Officer of the information
`technology company Ementor ASA
`from 2000 to 2003. Mr. Langseth was
`Senior Vice President of Finance and
`Control at the offshore engineering
`and construction company Aker Mari-
`time ASA from 1997 to 2000. Langseth
`worked at Arthur Andersen Norway
`from 1991 to 1997. Mr. Langseth is a
`member of the board of directors of
`Mesta AS. Mr. Langseth was certified
`as a Norwegian state-authorized
`public accountant in 1993 and holds
`a Master of Business Administration
`degree from the Norwegian School
`of Economics and Business Adminis-
`tration.
`
`Mr Reksnes was promoted to Execu-
`tive Vice President in April 2010, ini-
`tially to run PGS’ New Ventures busi-
`ness area and subsequently Marine
`Contract. From 2007–2010, he was PGS
`Marine’s President, EAME (Europe,
`Africa, Middle East) and CIS. His job
`titles at PGS have included President
`for Geoscience and Engineering, Pres-
`ident for Technology, Vice President
`for Profiling and Marketing, and Vice
`President, Technical Marketing. Per
`Arild Reksnes joined PGS in 2001 from
`his position as Chief Professional Geo-
`physics at Norsk Hydro. During his 16
`years at Norsk Hydro, he held several
`geophysics and management posi-
`tions. Mr. Reksnes holds a Master's
`degree in Applied Geophysics from
`the University of Oslo and a Master's
`degree in Technology Management
`from MIT/NTH (Norwegian University
`of Science and Technology).
`
`Mr Reinhardsen joined PGS in April
`2008 as President and Chief Executive
`Officer. Prior to heading PGS, he was
`Alcoa’s President, Global Primary
`Products Growth. At Alcoa, he was
`responsible for developing and imple-
`menting major primary metals and
`refining growth opportunities for the
`company worldwide. Mr. Reinhardsen
`joined Alcoa from Norway-based Aker
`Solutions ASA, an international engi-
`neering and construction contractor for
`the oil, gas, chemicals, petro chemicals,
`mining, and metal processing
`industries. As Group Executive Vice
`President for Aker Solutions based
`in Houston, Texas, he was responsi-
`ble for all non-European contracting
`operations and product businesses
`worldwide.
`
`Earlier in his career, Mr. Reinhard-
`sen led Aker Maritime ASA’s Global
`Products business and was engaged in
`merger and acquisition activities, new
`business development, marketing and
`sales, and investor relations. He also
`led Aker ASA’s seismic venture Aker
`Geo that was later sold to CGG. In June
`2009, Mr. Reinhardsen was elected
`to the board of directors of Cameron
`and he has been a member of the
`board of directors of Hoegh Autoliners
`Holdings AS and Hoegh LNG Holdings
`Ltd since 2005. He is also a member of
`the board of directors of Awilhelmsen
`AS. Mr. Reinhardsen earned a master’s
`degree in Applied Mathematics and
`Geophysics from the University of
`Bergen, Norway. He completed the
`International Executive Program of the
`Institute for Management Develop-
`ment (IMD) in Lausanne, Switzerland
`in 1991.
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 12
`
`

`

`11
`THIS
`IS PGS
`
`From left to right; Sverre
`Strandenes, Guillaume
`Cambois, Gottfred Lang-
`seth, Jon Erik Reinhard-
`sen, Magne Reiersgaard
`and Per Arild Reksnes.
`
`Sverre Strandenes
`Executive Vice
`President, MultiClient
`
`Magne Reiersgaard
`Executive Vice
`President, Operations
`
`Mr Strandenes was appointed
`Executive Vice President Multi Client
`in May 2010. He previously had been
`PGS’ Group President, Imaging &
`Engineering since November 2006.
`Strandenes has held several senior
`PGS management positions, includ-
`ing President, Marine Geophysical
`EAME Region (Europe, Africa, and
`Middle East). Prior to joining PGS in
`1995, Mr. Strandenes was the Geo-
`sciences department manager at
`Norsk Hydro Research Center. During
`his 14 years at Norsk Hydro he held
`several geophysics and manage-
`ment positions. Mr. Strandenes is
`a board member of Azimuth Ltd.
`Sverre Strandenes was awarded a
`Master of Science degree (Cand.
`Real) from the University of Bergen
`in 1981.
`
`Mr Reiersgaard joined PGS at its
`inception in 1990/91 and has held a
`number of key executive positions in
`the PGS Group. He has been Execu-
`tive Vice President, Operations since
`April 2010. Magne Reiersgard’s prior
`management roles at PGS include
`President, Marine Geophysical NSA
`Region, based in Houston; President,
`Marine Geophysical Asia Pacific
`Region, headquartered in Singa-
`pore; and Vice President, Marine
`Acquisition. Prior to joining PGS, he
`held various management positions
`in the survey division of Geoteam AS.
`Currently on the Board of Directors
`of IAGC (International Association of
`Geophysical Contractors), he is also a
`board member of the not-for-profit
`Society of Exploration Geophysics
`(SEG) Foundation. Mr. Reiersgard
`holds an electronics degree from
`Agder University College, Grimstad,
`Norway, and a business degree from
`BI Norwegian School of Management.
`
`Guillaume Cambois
`Executive Vice
`President, Imaging & Engineering
`
`Mr Cambois joined PGS in 2007 as
`the senior advisor spearheading
`deployment of PGS’ GeoStreamer
`technology. He took over as Marine
`Contract President, Asia-Pacific
`in March 2009 and in May 2010
`advanced to Executive Vice President,
`Imaging and Engineering. During a
`20-year career at the geophysical
`services company CGG prior to joining
`PGS, Guillaume Cambois held various
`executive management posts, such
`as Exe cutive Vice President, Data
`Processing and Chief Technology
`Officer. An active member of the
`Society of Exploration Geophysicists,
`he was the Society’s Vice President
`in 2007/2008 and is currently serving
`as Director at Large. Mr. Cambois
`received his Ph.D. in Geophysics from
`the University of Texas at Austin.
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 13
`
`

`

`12
`LOREM
`IPSUM
`
`A CLEARER
`IMAGE
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 14
`
`

`

`13
`LOREM
`IPSUM
`
`15
`PGS STRATEGY
`
`17
`HEALTH, SAFETY,
`ENVIRONMENT
`AND QUALITY
`
`20
`CORPORATE
`RESPONSIBILITY
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 15
`
`

`

`14
`A CLEARER
`IMAGE
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 16
`
`

`

`NEW BUILD PROGRAM
`INCREASES NUMBER OF
`STREAMERS PER VESSEL
`BY APPROXIMATELY
`
`50%
`
`15
`A CLEARER
`IMAGE
`
`PGS STRATEGY
`– THE INDUSTRIAL
`APPROACH
`
`The Industrial Approach is all about
`establishing a sound, industrial
`platform for delivering performance
`through the cycle and generating
`returns to shareholders.
`
`The platform is supported by three pillars: a vessel investment
` strategy, an operational strategy and a financial strategy.
`
`Vessel Investment Strategy
`• Investing in own capacity only when differentiation can be
`achieved
`• Newbuild program renews and expands PGS’ fleet, reduces
` average age of fleet vessels, and increases the average number
`of streamers towed per vessel by approximately 50 percent
`• Add new capacity step by step through the cycle, in line with
` market and replacement needs
`• Maintain critical mass. Market share is not an objective.
`
`Operational Strategy
`• Taking the industry lead in Health Safety Environment and
`Quality (“HSEQ”)
`• Further increase productivity advantage relative to peers
`• Implement differentiating GeoStreamer-based technologies
`on all vessels and in all imaging centers
`• Proactive MultiClient/Contract mix to ensure profit
`optimization over the cycle
`• MultiClient pre-funding level of 80-120 percent of capitalized cash
`investment
`• Emergence of GeoStreamer-based Imaging technologies
`• Technology pipeline with further profit potential.
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 17
`
`

`

`16
`A CLEARER
`IMAGE
`
`MARKET SHARE IN NUMBER
`OF STREAMERS
`
`PGS 21%
`WesternGeco 23%
`CGG 34%
`Polarcus 13%
`Dolphin 7%
`Others 2%
`As of year-end 2013 (PGS estimate).
`
`Financial Strategy
`• Prudent financial structure and conservative gearing policy
`• Focus on return on capital employed and dividend capacity.
`
`2015 marks the end of the current new build program. From then on
`the Company’s focus will increasingly be on:
`
`• Improving profitability, free cash flow, return on capital employed
`and dividend capacity
`• Leveraging the GeoStreamer equipped fleet and enhancing
`productivity differentiation
`• Continued MultiClient revenue growth and optimizing invested
`capital
`• GeoStreamer imaging as a new differentiator
`• Continued rollout of new technologies
`• HSE, Cost, and Quality leadership.
`
`PGS' STRATEGIC
`AMBITIONS
`
`To care for its
`stakeholders
`
`To deliver
`productivity
`leadership
`
`To develop
`superior
`data quality
`
`To innovate
`
`To perform
`over the cycle
`
`Caring for employees'
`health and safety
`alongside caring for
`the environment and
`society at large is
`good for business.
`Leadership in HSEQ
`contributes to the
`pledge to care for
`customers' success.
`
`Productivity leadership
`is delivered through
`the Company’s fleet of
`Ramform vessels and
`the GeoStreamer tech-
`nology. PGS intends to
`be recognized as the
`first port of call for cli-
`ents seeking tight turn-
`around times for large
`projects in a licensing
`environment that
`specifies ever-shorter
`lead times until the
`first exploratory well is
`drilled.
`
`
`PGS’ GeoStreamer
`technology drives the
`ambition to develop
`superior data quality
`that enables oil compa-
`nies to more accurately
`characterize subsurface
`features.
`
`
`Innovation is strate-
`gically important to
`differentiate. PGS was
`the first company to
`launch a dual-sensor
`streamer, the acclaimed
`GeoStreamer; the
`first to deploy vessels
`capable of towing more
`than 20 streamers, and
`the creator of unique
`reservoir-centric solu-
`tions and technologies.
`
`PGS is determined
`to perform over the
`cycle and mitigate
`its exposure to
`industry cyclicality by
`maintaining a strong
`balance sheet, taking
`a proactive approach
`to capa city and capital
`allocation between
`MultiClient and con-
`tract work, maintain-
`ing cost and capital
`discipline and focus on
`productivity , quality
`improvement and tech-
`nology differentiation.
`Achieving this ambition
`will improve profitabili-
`ty, free cash flow return
`on capital employed
`and dividend capacity.
`
`PGS ANNUAL REPORT 2013
`
`PGS v. WESTERNGECO (IPR2014-00688)
`WESTERNGECO Exhibit 2075, pg. 18
`
`

`

`17
`A CLEARER
`IMAGE
`
`LOST TIME INCIDENTS FREQUENCY
`(LTIF) Per million man-hours
`1,0
`
`0,8
`
`0,6
`
`0,4
`
`0,2
`
`0,0
`
`2010
`
`2011
`
`2012
`
`2013
`
`TOTAL RECORDABLE CASE
`FREQUENCY (TRCF) Per million man-hours
`2,0
`
`1,6
`
`1,2
`
`0,8
`
`0,4
`
`0,0
`
`2010
`
`2011
`
`2012
`
`2013
`
`HEALTH, SAFETY,
`ENVIRONMENT
`AND QUALITY
`Health, Safety, Environment and Quality
`(“HSEQ”) management and reporting
`are key parameters for the evaluation
`of business performance at all PGS
`management levels and by the
`Company’s Board of Directors.
`
`PGS has a strong Company-wide HSEQ culture. To further improve
`HSEQ performance and reinforce HSEQ management systems, PGS
`set three main goals for 2013 that were largely achieved:
`
`• Maintain a low incidence of recordable injuries, in particular
`Lost Time Injuries
`• Strengthen risk management and reduce overall risk exposure
`• Improve employee HSE awareness and performance.
`
`HSEQ Performance
`2013 saw an increase in the number of injuries, compared to 2012; nev-
`ertheless, the number of recordable injuries still remained lower than
`in prior years. The PGS organization (core fleet vessels and PGS offices)
`had the following health and safety incident levels in 2013:
`
`• Zero fatalities, compared with zero in 20